Friday, September 25, 2015

Agri Econ 21, Rice protectionism as poverty-maximizing policy

The other day, September 23, I attended a forum on "Zero Poverty" organized by the AIM R.Navarro Policy Center, NEDA and UNDP, at Edsa Shangrila Hotel. I don't believe in "zero poverty" of course, but I went there to hear what the speakers have to say and see their numbers/data.

In the morning session, the focus was on food poverty and speakers were former NEDA chief Cielito Habito, UP School of Statistics (UPSS) Dean and Prof. Dennis Mapa (speaking in this photo), IRRI Dep. Administrator Bruce Tolentino, and  DTI Assistant Secretary Fita Aldaba.

Jess Lorenzo posted that photo in fb with a note, "Dr. Dennis Mapa explains how rice price shocks have a direct correlation in hunger incidence.... IN JUST ONE QUARTER! He also notes that the effect is becoming more dynamic."

Below, Bruce Tolentino of IRRI, also posted by Jess.

Dennis and Bruce showed one chart, global and  PH rice prices over the past 15 years or so. Notable in that chart was that around 2008 or 2009 until today, world rice prices were declining and remained low but PH rice prices were high. 

During the open forum, I stood and commented the following:

1. "Zero poverty" is not possible under a rice protectionism policy (via quantitative restrictions or QR in rice imports, NFA importation monopoly, taxation of imported rice) which significantly contribute to higher local rice prices. 

2. Huge National Food Authority (NFA) debt, about P160 B as of end-2013 and could be around P170 or P180 B now. At just 3% interest rate, we are paying P5B or more each year on interest payment for the NFA debt. 

3. Need to allow large scale corporate rice farming. This will contradict the endless, no time-table, agri investment-busting agrarian reform (AR) program. Rice farms then will use science-based, biotech and mechanized farming and allow 5-10 MTs/hectare vs. current productivity of around 3.8 tons/hectare. Plus lower post-harvest losses.

For nature-created poverty, say a huge flood wiped out people's houses, crops and tractors, vehicles and other properties, government assistance will be useful and justified. For self-inflicted poverty like laziness and irresponsibility, no amount of government assistance and intervention will solve it.

That is why there should be more personal, parental, civil society responsibility in society, less government responsibility. The latter should focus on enforcing the rule of law and protecting the people's three basic freedom: freedom of private property ownership, freedom from aggression, and freedom of self expression and liberty.

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